Risks and uncertainty factors
The FM Mattsson Group’s operations are exposed to operating and strategic risk, as well as financial risk. Operating and strategic risks include business and liability risk and financial risk includes liquidity, interest rate and currency risk. FM Mattsson Group continuously seeks to identify and assess the risks the company is exposed to.
Financial risks include liquidity, interest and currency risk. FM Mattsson Group works continuously to identify and assess risks. One of the key operating risks FM Mattsson Group has identified is the risk exposure to the metals copper and zinc, which are raw materials for the alloy, brass. Some one-third of FM Mattsson Group’s total expenses for direct materials consist of brass metal input into works-made and purchased components.
Risk management for commodity prices addresses avoiding speculative risks and creating predictability. For FM Mattsson Group’s own requirements of brass, this is achieved through short-term agreements and ongoing financial hedges. For purchased components, FM Mattsson Group seeks to secure contracts with a low frequency of price changes.
The current pandemic COVID-19 has created uncertainty about the future for the business. Spreading of the infection can mean risks for health and safety for employees, customers and suppliers. It also creates increased credit risk and fluctuations in demand for products and ability to deliver due to either spreading of the infection or measures to prevent this.